Losing money is obviously a bad thing on Wall Street, and
everyone's chalking this bad thing up to a surprising jolt of
volatility toward the end of the year.

And this is where the lesson comes in. The thing is, traders over
the summer were begging for volatility. A market without
volatility is like an old ship getting caught in the doldrums — a
sea without wind.

Back then, there was talk of a mass trader culling the likes of
which The Street hadn't seen since 2010, when new regulation
forced a lot of banks to get rid of entire trading desks.

"The first six months of the year were crazy for hiring," Jesse
Marrus, founder of the recruiting firm StreetID, told
Business Insider back then, "then it hit the brakes. Hard ...
If you're not coming from one of the top funds, CFA, Ivy
education, and if you haven't run $500 million, you're not
getting the job."

So, as you can imagine, everyone was completely freaking out.

Lucky for them, though, the market got a touch — just a touch —
volatile into the fall, and trading revenues were saved. All was
well on Wall Street.

Of course, that desire for some volatility didn't go away — it
never does. It's just that when the market got volatile in
December, it surprised everyone, even stock traders who did way
better than bond traders in the fourth quarter. The stock market
went down (which it tends to do sometimes, though in this
seven-year bull market, we're really not used to it. More and
more, when it does go down, traders think the big bull-market
show is over).

The S&P 500 freaked
traders out on two occasions in 2014.
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As for bond markets — here's the simplest example of something
that caught a lot of people off guard — many traders thought
rates would rise as the Federal Reserve continued unwinding its
quantitative easing bond-buying program. It did not.

This "Are rates rising? No!" part of the story of
post-financial-crisis monetary stimulus is now old.